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Main rules cross-border work and taxes

Where to pay taxes for cross-border work?

The country where you are liable for taxes depends on bilateral agreements that most countries have signed (double taxation treaties). Such agreements determine the country where an employer is liable for payroll tax in cross-border situations in order to prevent double taxation (in the country of residence and the assignment country). On the one hand to prevent double taxation (in the country of residence and work) and on the other hand to prevent no tax being paid (neither in the country of residence nor in the country of employment).

update: june 2023

When assigned work in another country, the implications for the following taxes should be assessed:
  • Payroll tax, wage tax, income tax
  • Corporate income tax and tax on profit
  • Value added tax (VAT)

The main rule for wage and income tax: an employee pays tax on the work performed in the assignment country. Under specific conditions, an employee may continue paying tax in the country of residence while working in a different country. The 183 days rules plays a role in this respect.

Please note: a general misunderstanding is that an employee is not liable for tax abroad when working in the country fewer than 6 months (183 days). This applies only subject to compliance with ALL conditions.

In some situations, the employee is liable for income tax from the first working day in the relevant country, rather than after 183 days!
For example, this applies in the following situations:

  • Temporary agency work in an international context
  • Secondment to a subsidiary in a different country
  • Temporary consultancy to a client

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Since 1972, Interfisc has offered international HR & Payroll solutions in the Netherlands, Belgium, Germany, France, the United Kingdom, and Italy. We do this from our offices in the Netherlands and Belgium, and with an international team of around 45 committed and caring employees. 

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